Ahead of equity infusion, AI takes a shot at turnaround

The government appears to be making an all-out effort to turn around the ailing Maharaja operationally till it decides on further equity infusion.

Top civil aviation ministry officials said on Thursday that Air India has decided to add five new international destinations, 22 new city pairs and at least 11 new domestic destinations in the upcoming winter schedule. Also, taking the recent criticism by the Comptroller & Auditor General seriously, the airline will now substantially increase its aircraft utilisation (number of hours in a day when aircraft is actually flying) for long-haul and short-haul planes.

A senior official in the Ministry of Civil Aviation said these decisions were taken in a review meeting held on Thursday.

There will be more services to Southeast Asian cities such as Kuala Lumpur and Singapore from Delhi, Mumbai and Chennai; AI is also starting an Amritsar-Lucknow-Dammam connection.
On the domestic front, the airline is expected to give low-cost carriers such as SpiceJet a run for their money by connecting Tier II and Tier III cities such as Port Blair, Dehradun, Guwahati, Ranchi and Vijaywada to Delhi. Also, flights will be launched between Kolkata and Bhubaneshwar, Bangalore-Pune, Hyderabad-Goa, Pune-Goa and Hyderabad-Vijaywada. The airline will use 6-7 CRJ aircraft and 6 ATRs for these short-haul flights.

The official said the airline has reduced its operating losses from Rs566 crore in April to Rs260 crore in August; revenues have improved from about Rs1,000 crore to Rs1,245 crore. Also, plans are afoot to increase the aircraft utilisation for short haul as well as long haul aircraft to 11 hours and 14 hours 20 minutes, respectively.

In the latest CAG report, the airline has been severely criticised for using its aircraft for less than optimal hours each day, thereby losing valuable revenue. On an average, Air India’s aircraft utilisation has been 9.1 hours a day, the lowest in the industry.

To a question on whether the airline is hiring staff to manage such rapid expansion, this official said that of the 1,700 cabin crew members needed, about 500 have already been recruited.

Air India managed to get healthy load factors through August at 72.8%. This means almost three in four seats on the airline were filled. Also, its domestic market share improved to 17.4%.